Tenancy hidden fees banned – The Tenant Fees Act 2019

The Tenant Fees Act 2019, which came into force on 1^st June 2019, bans so-called ‘hidden fees’ that are charged to tenants throughout the course of tenancies.

Previously, some tenants found they were being charged costly fees in addition to their rent and deposit such as administrative fees and credit check fees. These additional fees could add several hundred pounds to the upfront cost of renting a property. The Tenant Fees Act seeks to change this.

The Act is cleverly worded: ALL fees are prohibited unless expressly allowed by the Act. The legislation is designed to close off loopholes, and the wording prevents landlords and letting agents inventing new names for old (now prohibited) fees.

Whilst charging rent, tenancy deposits and holding deposits and certain other limited specific costs are permitted, new restrictions have been introduced such as a cap on how much letting agents and landlords can charge for deposits.  For example, for a property which has an annual rent of under £50,000, any tenancy deposit taken must not exceed five weeks’ rent. 

Letting agents and landlords are significant affected by the Act, which some consider to be the biggest change for letting agents for several decades. It is not yet clear whether agents and landlords will absorb the costs which can they no longer charge to tenants or pass this cost on to tenants through rent increases.

For further information about the Tenant Fees Act 2019, please contact Holly Baker or Janice Young in the Property Litigation team.